Disney Star is mulling legal actions against Zee Entertainment for backing out from a  $1.4 billion sub-licensing agreement for TV broadcast of international cricket matches in India, according to industry sources.

This could brew another legal trouble for Zee Entertainment Enterprises Ltd (ZEEL), which is already facing an arbitration plea by Sony Group at the Singapore International Arbitration Centre, claiming USD 90 million for breach of conditions of their merger agreement, a PTI report on Friday said, a day when India was busy celebrating its 75^th Republic Day.

Disney Star, an Indian subsidiary of media conglomerate The Walt Disney Company, is working on its strategy over the development, said industry sources.

If the rescinded agreement contained an arbitration clause, then Disney Star would have to resort to arbitration proceedings for the resolution of the dispute and if the agreement is short of the arbitration clause, then Disney could initiate legal proceedings to sue Zee for damages, the PTI report stated.

ZEEL, which has already missed the first instalment of around $200 million, has informed Disney Star that it does not intend to move ahead with this deal. According to the sources, this is a fallout of the collapse of its merger deal with Sony.

The instalment to be paid to Disney Star was part of the $1.5 billion investment committed by Sony Group after its merger with ZEEL, said another industry source while confirming the development.

Sony Corporation had on Monday (January 22) announced the termination of the $10 billion merger agreement with ZEEL, while seeking USD 90 million for breach of conditions besides initiating arbitration.

As per the merger agreement between ZEEL and Sony, the Japanese entity was supposed to invest USD 1.575 billion in the merged entity and have a majority stake.

There were no immediate comments either from ZEEL or Disney Star over the development.

On August 30, 2022, ZEEL had announced entering a strategic licensing agreement with Disney Star for television broadcasting rights of the ICC Men’s and Under-19 global events for a period of four years.

As per the agreement, ZEEL was supposed to have exclusive television rights for ICC men’s events, including the ICC Men’s T20 World Cup, which will be played in 2024 and 2026, ICC Men’s Champions Trophy (2025), and the ICC Men’s Cricket World Cup (2027), along with key ICC U-19 events, a press statement had said.

ZEEL on Wednesday (January 24) approached the corporate disputes tribunal the National Company Law Tribunal (NCLT) to get Sony to honour a $10 billion merger deal.

Sony had resisted the demand by Zee Chief Executive and Subhash Chandra’s son Punit Goenka, who was investigated by Sebi over fraud allegations, to stay on after the merger.

Three days after Sony called off the deal, ZEEL MD & CEO Punit Goenka addressed a town hall meeting of around 3,000 employees across the globe, in which he asked them to move forward and chase new opportunities.

“Our industry is witnessing rapid changes, and these winds of change are giving us a new shape. We have to mould ourselves to be well-positioned in order to capitalise on the opportunities coming our way. We have been leaders over the last 3 decades and have delivered value to our stakeholders, year on year,” he said.